Motilal Oswal has maintained a 'Buy' rating on Ventive Hospitality with a Rs 700 price target, citing growth in its domestic and international portfolios. While operating revenue and profit grew in the second quarter, investors should note a sharp decline in bottom-line profit and rising debt levels. The company is also navigating ongoing regulatory challenges.
Motilal Oswal has maintained its positive outlook on Ventive Hospitality, setting a target price of Rs 700 per share. This recommendation follows the company’s second-quarter earnings report for the fiscal year 2027, which presented a mix of operational growth and bottom-line pressure.
The recent quarterly performance highlights the company's current financial reality. In the second quarter of FY27, Ventive Hospitality reported an operating revenue of Rs 5.51 billion, a 13% increase compared to the same period last year. Operating profit (EBITDA) also showed growth, rising 11% to Rs 2.11 billion. Despite this top-line expansion, the company’s net profit fell by 47% year-on-year. This significant drop was largely due to higher depreciation and amortization expenses, which weigh on the company's final earnings figures.
The brokerage’s optimistic view is largely based on the strength of the Indian hospitality market. Projections for growth are supported by consistent activity in the Meetings, Incentives, Conferences, and Exhibitions (MICE) sector and the continued expansion of Global Capability Centers (GCCs) in key Indian markets like Pune. The international portfolio is also expected to contribute, with management anticipating a better second half for the Maldives business as travel demand remains resilient.
Investors should look closely at the company's balance sheet fundamentals, which provide a more cautious perspective. As of September 30, 2026, the company’s consolidated net debt stood at Rs 18.59 billion. With a net debt-to-EBITDA ratio of 1.6x and a relatively low interest coverage ratio of 2.47x, the company's ability to service its borrowings is a key area for shareholders to monitor. Additionally, trade receivables have been growing faster than revenue, which may indicate potential pressure on working capital efficiency.
On the corporate and regulatory front, there have been notable updates. On November 2, 2026, the company received approval from both the BSE and NSE to reclassify 11 promoter group entities into the public category. However, the company also faces legal hurdles. It is currently appealing an NCLT order dated September 23, 2026, which relates to mandatory shareholder and creditor meetings regarding a subsidiary amalgamation scheme.
Moving forward, the primary factor for investors to track will be whether the company can stabilize its profit margins while dealing with high depreciation and interest costs. The resolution of the ongoing NCLT appeal and the company’s ability to manage its debt levels will be equally important in determining its long-term financial health.